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401(k) after retiring
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Stan Brown
Jul 11, 2017, 12:10:41 AM7/11/17
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Just speaking hypothetically --
Someone has been contributing $2K per monthly paycheck to his 401(k),
which would total $24K for the year. But in August, being 68 years
old, he retires.
Can he still pay the remaining $8K into the 401(k) for that year, or
must a 401(k) be funded exclusively from payroll deductions?
Possibly relevant facts:
* The employer does not match his contributions at all.
* His compensation for the 8 months worked is over $24K.
--
Stan Brown, Oak Road Systems, Tompkins County, New York, USA
http://BrownMath.com/
http://OakRoadSystems.com/
Shikata ga nai...
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Arthur Rubin
Jul 11, 2017, 9:57:30 AM7/11/17
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On Monday, July 10, 2017 at 9:10:41 PM UTC-7, Stan Brown wrote:
> Just speaking hypothetically --
>
> Someone has been contributing $2K per monthly paycheck to his 401(k),
> which would total $24K for the year. But in August, being 68 years
> old, he retires.
>
> Can he still pay the remaining $8K into the 401(k) for that year, or
> must a 401(k) be funded exclusively from payroll deductions?
>
> Possibly relevant facts:
> * The employer does not match his contributions at all.
> * His compensation for the 8 months worked is over $24K.
In general, a 401(k) can only be covered by payroll contribitions. However, subject to plan limits, he can contribute up to 100% (more likely, 92.35%) of his last few paychecks, up to the $18-24K total for the year.
> Just speaking hypothetically --
>
> Someone has been contributing $2K per monthly paycheck to his 401(k),
> which would total $24K for the year. But in August, being 68 years
> old, he retires.
>
> Can he still pay the remaining $8K into the 401(k) for that year, or
> must a 401(k) be funded exclusively from payroll deductions?
>
> Possibly relevant facts:
> * The employer does not match his contributions at all.
> * His compensation for the 8 months worked is over $24K.
If he has a side business, he could set up a "solo 401(k)", and contribute the remaining $8k there, if he has $8k in progits to contribute.
And there is always the $6500 IRA limit, if elegible for a deductible IRA.
--
Arthur Rubin, AFSP, CRTP
Brea, CA
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